Credit card Debt and outgoings more than incoming!

Moneytroubled

Hi There,

Im a single female in my late 20's with credit cards debts currently at £5000.
Recently my job had come under threat and i had to take a pay cut or lose my job altogether so i opted for the pay cut -which means now after taxes im clearing less than a 1k a month!

i live alone renting privately with a monthly rental agreemnt of £500 and c/tax single occupancy of £71, travel expenses to work monthly about £60 and shopping bill of about £100 a month.
I've stopped buying ciggies and have cut out little treats for myself such as buying magazines etc on a weekly basis to save a bit of cash.

the credit cards i owe are Natwest, Virgin and the Post Office. The interest on these cards have not increased. I have had these cards from 2008.

i have missed a few credit card payments but having checked my credit report my credit score is "very poor" however i do not have any defaults. but because of my poor credit rating I cannot apply for another card to transfer debt for more manageable single payments or take advantage of the interest free period.
i can afford to make the minimal monthly repayments on these cards, but its having no impact on the actual debt as this is just paying the interest.

I have now set up a direct debit on my current account to avoid the late payment charges, but because my outgoings are considerably more than my incoming im constantly eating into my overdraft which means further charges at the end of the month.


Please can anybody advise on what I should do next? Any suggestions would be greatly appreciated.

Many Thanks in advance

mr.ton

With the greatest respect....your credit score is not a priority, life still goes on regardless.
I would not encourage any further borrowing of any type whatsoever.
Your priorities are the basic things like rent/c.tax/utilities/food/clothes etc.....
Everything else is an insignificance & if it means you paying all the creditors you mentioned a reduced amount then so be it, they'd have to accept it in a like it or lump it sort of way.
Perhaps even consider setting up a basic account with someone like the Co-operative, that way you'll have control over everything & who gets what/when etc...

pipsi_2

I suppose moving into shared accommodation would be one way to save a bit of money. It's terrible i know, i'm doing it at the moment and hate every second i spend here, it's getting me really depressed but my rent, council tax and water rates are only £339 per month, plus utilities. I disadvantage there is i live with people who aren't conscious of what power they're using, our gas and electricity bills are always massive, my share is much much more than what i was paying when i was living alone. Try finding somewhere where bills are included if you think this might be an option for you. Is moving back home with your parents for a few months an option?

You could approach your credit card companies and explain your situation and come to an arrangement to pay back less than you currently are, you mention that you already have a poor credit rating and can't get a new credit card, so this might be an option for you, it would make your credit rating worse but if things are already bad it might be a useful thing to do.

£100 a month for food doesn't sound like a lot so i'm assuming you've already cut back here, and i'm guessing you can't cut back on what you're travel expenses are. Stopping smoking and stopping buying magazines etc is a good start so well done for doing that. Is taking on a second job an option for you? Even if it's only on shift a week in a local pub, it could cover your weekly food bill. Do you have a spare room? Is getting someone else to move in with you to share the rent cost an option?

Moneytroubled

thanks for yor responses, i will look into the co-operative basic account.
Mmoving back to my parents is not an option as they live in London, i moved from London to brum to study, so although moving back to my parents would be ideal it would mean being unemployed for a while whilst i was looking for a job, which means even more charges for not making the minimum payments.

i have flat shared before and it was the worst year of my life, i had a few bad experiences with that which i wish never to re-live again.
I have been looking for a evening job, but to no avail im afraid!

i've heard that CAB offer debt management. Does anyone know what this involves?

snowqueen555

Move into somewhere cheaper like a houseshare/flatshare, there is no better way for you to save money, over 50% of your earnings is a lot, and that isn't including bills or c/t

bottleofred

Hi Moneytroubled,

You should definitely move somewhere cheaper if possible and concentrate solely on paying your rent, council tax, food, electric bills and all other necessary bills prior to considering paying the credit card companies. They won't like it, but it appears you don't seem to have much option at the moment. You could consider posting your statement of affairs to see if you can save money elsewhere.

NorthernLas

Hi MT - There are a number of charities that offer debt management for free see this link https://forums.moneysavingexpert.com/discussion/2077631.

Both CCCS and national debtline websites are very good. CCCS has an on-line tool called debt remedy and NDL has a self help-pack to guide you through sorting out debts.
If you are increasingly using your overdraft, then the debt you have is / will be soon un-sustainable, so you are doing the right thing in cutting back and looking to sort it out.
If you cannot reduce your outgoings (due to rental agreement) or increase your income, then you need to ensure prioirty bills are paid and then come to an arrangement to pay your creditors pro rata from what you have left. If you have a credit card and bank account with the same bank you need to be aware that they can take money from your current account to pay the credit card (called offsetting). Therefore one of the first things that people do is to get a new basic bank account so they are in control of their money.

Good things to do are a statement of affairs and to start a spending diary to identify what you actually spend your cash on. Read this article and use the link inside it for an SOA https://forums.moneysavingexpert.com/discussion/107280

Moneytroubled

HI thanks again for all your comments and suggestions. I am in the middle of compiling my SOA so I shall post this up very soon. I dont want to speak to soon, but my living arrangements are looking up -a friend mentioned that she was looking for a place to stay so i have said that she could move into mine as I have a two bedroom apartment (well more like 1 1/2 bedrooms). She will be moving in today!

Should i post my SOA based on the rent, c/tax (which i will now need to contact the council to advise as it was based on single occupancy) and other bills now being halved?

Even after this, money will still be a bit tight but i will have alot more pennies to play with!

I have looked into the basic account as i have read on previous posts about "offsetting" this would surely cripple me if this was to happen so this is definately a priority of things to do!

izzybusy23

Moneytroubled wrote: »

HI thanks again for all your comments and suggestions. I am in the middle of compiling my SOA so I shall post this up very soon. I dont want to speak to soon, but my living arrangements are looking up -a friend mentioned that she was looking for a place to stay so i have said that she could move into mine as I have a two bedroom apartment (well more like 1 1/2 bedrooms). She will be moving in today!

Should i post my SOA based on the rent, c/tax (which i will now need to contact the council to advise as it was based on single occupancy) and other bills now being halved?

Even after this, money will still be a bit tight but i will have alot more pennies to play with!

I have looked into the basic account as i have read on previous posts about "offsetting" this would surely cripple me if this was to happen so this is definately a priority of things to do!

Have you tried the entitled to website to see if you are entitled to any tax credits and housing benefit? If you are clearing just £1000 a month I guess you must be on about £15k ish; so I am sure you must be entitled to some help. Tax credits and HB aren't just there for people with children but for low earners too, which you are as you are paying out all your living costs on one wage.

www.entitledto.co.uk